5 Reasons to Hire a Lawyer for Your Small Business
A good lawyer will protect your ownership interests and help you avoid paying for settlements or lawsuits. If you’re still unsure if you need a lawyer for your business, read this post to find out the five reasons that having a lawyer can ensure your company’s long-term success.
1. Prevent Expensive Lawsuits
John F. Kennedy once said, “The time to repair the roof is when the sun is shining.” This sentiment holds true for hiring lawyers too.
In a perfect world, you’d only need a lawyer when you know you’re open to liability. Unfortunately, unless you’re a legal expert, it’s difficult to know when you may be held liable. That’s why—to effectively prevent a lawsuit—you should hire a lawyer as soon as possible so you can understand all your potential legal risks. You simply can’t put a value on having a trusted legal adviser to call before making a potentially damaging decision for your business.
2. Protect Intellectual Property
Trademark and copyright law is complicated. Even if you’re able to obtain protection for your products or services, it’s difficult to know exactly what rights you have without a legal expert. In some cases, obtaining a patent won’t give your business much of an advantage. A patent lawyer can help you decide whether it makes sense to spend the time and money to obtain a patent.
In addition, the Small Business Association (SBA) suggests hiring a lawyer to help you anytime you’re planning on filing a patent.
3. Avoid Discrimination Lawsuits
Hiring and firing employees is fraught with legal risk. You could open yourself up to a lawsuit by simply asking the wrong question during an interview. Luckily, a lawyer can coach you through what you can and cannot say to help you avoid a potential discrimination lawsuit.
Similarly, firing an employee, even a disruptive one, has legal risks. As a small business owner, even the threat of litigation can be a detriment to your livelihood. Unfortunately, predatory lawyers know this, and will take advantage of the situation by forcing you to pay and settle rather than risk a legal battle. With an experienced lawyer on your side, you can proactively protect yourself from frivolous lawsuits by consulting your lawyer prior to making any hiring or firing decisions.
4. Protect Ownership Rights When Obtaining Funding
It’s especially important to have a lawyer if you plan to raise equity to fund your business. When you raise equity, you’ll inevitably have to give up some control of your company. A lawyer will help you understand exactly how much control you’ll be giving up based on the funding arrangement. That way, you minimize the chance of giving up too much control of the company you worked so hard to build.
5. Laws Vary by State
As if the legal system wasn’t complicated enough, it also changes depending on the state you operate in. For example, tenant’s rights vary considerably state by state. If you operate properties in multiple states, you’ll likely have to spend hours to understand all the various legal nuances of operating property in those areas.
Whatever you do, whether it’s running a retail store or manufacturing raw materials, your time is better spent on your specialty than researching hundreds of legal statutes. Get a lawyer to do it for you, so that you can focus on running your business.
According to the NFIB, small businesses pay an estimated $35.6 billion each year out of pocket to settle claims. Additionally, Rocket Lawyer reports that the median cost of a lawsuit including a contract dispute is about $91,000. If you want to avoid being part of these statistics, a lawyer is your best bet. Think of it like an insurance policy for your business!
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.